Polysilicon
328.6%
Ingot and wafer
420.0%
Solar cells
338.5%
Solar glass
81.8%
Module production excluding glass
190.3%
Inverter
14.3%
EU-production cost premium(relative to using Chinese products)
Solar PV
How Union-origin requirements could affect solar costs
The proposed Industrial Accelerator Act would introduce Union-origin requirements for PV cells and inverters. These components can cost more to manufacture in the EU, but the effect becomes smaller when measured against a complete solar system. In renewable-energy auctions, an estimated cost difference above 20% may be presumed disproportionate.
Core scenario
The EU–China cost gap is largest at the component stage
The red bars compare EU and Chinese production costs for individual components. The downstream bars use only the proposed cells-and-inverter requirement.
Delivered PV module
50.6%
Complete utility-scale PV system
9.8%
Electricity cost over the project lifetime
6.5%
EU-production cost premium(relative to using Chinese products)
Chinese reference: low prices for Chinese-made PV products supplied to Europe in 2025. It is not a project built in China.
What would the IAA proposal require for solar PV?
If adopted, it would set origin requirements for two parts—the PV cell and the inverter—in certain publicly bought or supported projects. It would not require every part of a solar system to come from the EU.
Show me the first requirement↓The PV cell must be of Union origin
Most PV modules use crystalline silicon. The chain runs from polysilicon to an ingot, then a wafer, a PV cell and finally a PV module. The cell is the part turning sunlight into electricity.
PV module manufacturingFrom raw silicon to a finished module
- 01PolysiliconPurified silicon feedstock
- 02Silicon ingotCrystal grown from molten polysilicon
- 03WaferIngot sliced into thin sheets
- IAA category04PV cellTurns sunlight into electricity
- 05PV moduleConnected solar cells
Polysilicon, ingots and wafers may still be imported
The proposal names the finished cell, not those earlier inputs.
PV module manufacturingFrom raw silicon to a finished module
- 01PolysiliconPurified silicon feedstock
- 02Silicon ingotCrystal grown from molten polysilicon
- 03WaferIngot sliced into thin sheets
- IAA category04PV cellTurns sunlight into electricity
- 05PV moduleConnected solar cells
Cells are assembled into a PV module
A PV module contains connected cells sealed between protective layers. The module itself is not subject to Union-origin requirements, according to the proposal.
PV module manufacturingFrom raw silicon to a finished module
- 01PolysiliconPurified silicon feedstock
- 02Silicon ingotCrystal grown from molten polysilicon
- 03WaferIngot sliced into thin sheets
- IAA category04PV cellTurns sunlight into electricity
- 05PV moduleConnected solar cells
The inverter must also be of Union origin
A PV array needs an inverter, mounting, cables and other equipment. The inverter changes the modules’ direct current into electricity that a building or the grid can use.
A working solar systemThe module is only one part
Complete PV systemPV array + inverter + other equipment
The rule would apply through three channels
From three years after entry into force, the cell and inverter criteria would apply in covered public procurement, in 40% of renewable-energy auctions, and in covered purchase-support schemes.
Where the rule would apply
Public procurement
Public bodies buying covered goods, services or works.
Renewable-energy auctions
Auctions used to support new renewable-energy projects.
Purchase-support schemes
New or updated schemes that help people or companies buy solar.
The rule need not be applied in every circumstance
Procurement, auctions and purchase support use different thresholds to determine when costs are excessive. Additional safeguards cover supply and delay.
When an excessive-cost threshold is crossed, or another safeguard applies, the government or authority is not required to apply the Union-origin requirements. It may nevertheless choose to apply them.
If the rule is difficult to meetDifferent channels use different thresholds
Cost difference may be presumed disproportionate.
Other grounds include supply, compatibility and delay.Cost difference per auction may be presumed disproportionate.
The proposal does not prescribe one cost metric.Caps on extra compensation—not cost exemptions.
20% applies to schemes addressing energy poverty.PV module manufacturingFrom raw silicon to a finished module
- 01PolysiliconPurified silicon feedstock
- 02Silicon ingotCrystal grown from molten polysilicon
- 03WaferIngot sliced into thin sheets
- IAA category04PV cellTurns sunlight into electricity
- 05PV moduleConnected solar cells
The added cost falls from the cell to the complete system
Producing the cell in the EU adds an estimated 4.4 €ct/Wp. The inverter adds another 0.5 €ct/Wp at project level. The calculations below carry these absolute differences forward, not the component percentages.
Cost premium at each stage
Measured againstthe PV cell alone
060 €ct/Wp
1.3 + 4.4 = 5.7 €ct/Wp
338.5%
Measured against the cell alone.
The PV cell: 338.5%
A Chinese-produced cell costs about 1.3 €ct/Wp. Producing it in the EU adds an estimated 4.4 €ct/Wp, so the increase is very large relative to the cell alone.
But a solar project does not buy cells in isolation. The same absolute increase becomes smaller when it is measured against the finished product.
The inverter: 14.3%
The inverter has a higher starting price and a smaller EU production gap: about 0.5 €ct/Wp in the utility-scale comparison.
The inverter is separate from the module. It joins the cell when we move to the complete project.
A delivered PV module: 50.6%
The cell’s 4.4 €ct/Wp increase is now measured against a delivered module costing 8.7 €ct/Wp.
Only the cell changes here. The glass, frame, encapsulant and module assembly stay at their reference costs.
A utility-scale system: 9.8%
A complete utility-scale project costs about 50 €ct/Wp once mounting, cabling, grid connection and labour are included.
At this stage the cell and inverter together add 4.9 €ct/Wp. The other project costs do not change.
Electricity over the project lifetime: 6.5%
The additional project cost translates into about 0.34 €ct per kilowatt-hour over the project lifetime, on a reference cost of 5.20 €ct/kWh.
In this scenario, the modelled electricity-cost increase stays below the 20% auction threshold
The same origin requirement can look very expensive at component level and much smaller at project level.
As a rough illustration, the requirement raises the cost of a small rooftop system by about 5.5%. This estimate reuses the utility-scale cell and inverter premiums, although residential component premiums may differ.
The comparison marks the 20% auction threshold for the utility-scale results and the 15% and 20% purchase-support caps for the rooftop estimate.
Next: change the assumptions
The interactive model follows the utility-scale branch
Change the Chinese reference, manufacturing scope and cost inputs to see how the result moves from component production to the delivered module, complete project and electricity cost over its lifetime.
03 · Interactive model
Choose the Chinese reference and EU-production scope
This model follows the utility-scale branch above. The source shown beside each input identifies its basis.
EU-production scope
Which manufacturing stages change?
Includes both components the proposal names (cells and inverter)Wider selections go beyond the proposal.
Manufacturing-cost gaps
Adjust the selected stage assumptions
Inputs are absolute cost differences. Moving a slider changes the module, system and LCOE results that depend on that stage.
Reference costs and conversion to electricity cost
These inputs set how much the same €ct/Wp gap adds to module, system and electricity costs. They normally move together when the Chinese benchmark is switched.
Sources
Solar evidence
SolarPower Europe / Fraunhofer ISE 2025
Table 5, PDF p. 53: cost breakdowns of a utility-scale system with low-priced Chinese products (2025), with large-scale EU production and with a broader EU downstream package. Figure 19, PDF p. 36: delivered-module costs for Chinese production at a sustainable margin and for large-scale EU production. The conversion from system cost to electricity cost comes from the source's broader LCOE case.
Fraunhofer ISE 2026
Presentation of 27 February 2026: approximate cost differences between large-scale EU production and Chinese production at a sustainable margin for polysilicon, ingot/wafer, cells, cell-to-module production and transport.
IEA ETP 2026
Solar PV manufacturing-cost comparison and executive-summary discussion of the module share in final system cost.
IEA residential inverter analysis 2026
Published 29 July 2026, section on installation-cost effects: small-scale residential and commercial installations in the European Union cost around USD 1,000/kW (around EUR 890/kW).
COM(2026) 100
Clean-technology origin requirements, including wind, solar PV and electrolysers: added NZIA Annex II, printed pp. 65–68. Auction derogation: Article 34(5)(f), printed p. 61.